Factor Prices under Monopoly for Their Products

Quarterly Journal of Austrian Economics 13, 1 (2010) 48-70

23 Pages Posted: 15 Aug 2014

See all articles by Xavier Méra

Xavier Méra

Université catholique de l'Ouest

Date Written: March 2010

Abstract

Revisiting Rothbardian monopoly price theory and extending it to the realm of factor pricing, this paper explains how grants of privileges to capitalists can lower labor and land factors' prices compared to what would prevail in a free market environment. Monopolistic grants to capitalists make for situations where both monopoly of demand for factors and monopoly of supply for their products are inextricably intertwined. Combined with established considerations regarding inelasticity of demand for the monopolized product, its impact on substitutes and the interdependence of factor markets, we show how they can trigger an overall downward pressure on original factor prices.

Keywords: monopoly, factor prices, labor, capitalists, interventionism, monopsony, monopoly, income distribution, privileges

JEL Classification: B5, B53, D4, D42, E2, E25, J2, J23, J3, J31, J4, J42, P4, P42, P5, P51

Suggested Citation

Méra, Xavier, Factor Prices under Monopoly for Their Products (March 2010). Quarterly Journal of Austrian Economics 13, 1 (2010) 48-70, Available at SSRN: https://ssrn.com/abstract=2479969

Xavier Méra (Contact Author)

Université catholique de l'Ouest ( email )

3 place André Leroy
Angers, 49000
France

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